Indirect Cost on Gifts

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Restricted Gifts 10% Charge

A 10% indirect cost (IDC) is assessed on expenditures made from restricted gift accounts. The IDC revenue is posted to a high-level account per college, and the IDC expense is posted to the restricted gift account. See the Indirect Costs Recovery Entry section below for more details.

All restricted gift accounts receive a 10% administrative cost charge on expenses, except for the following:

Endowment income accounts

Accounts established to provide financial aid to undergraduates and graduate students (Higher Ed Function Code 49XX)

Waiving the 10% Charge

Endowed Division

Complete a Return of Indirect Cost on Restricted Gift Accounts form with dean/director approval and send it to the Division of Financial Affairs (DFA) with new account documentation. Before the IDC is waived, all requests will be forwarded for approval to the University Budget Office.

Endowed units must complete this form to request a waiver of IDC that has been charged to a restricted gift account. Once the form is submitted and approved, the charge for the cost will be reversed. If the "Effective Date of Change" is prior to the current month, the Accounting office will prepare a journal to make the change retroactively.

Contract Colleges

Send a memo or letter from the college dean to DFA with new account documentation.

Return of Indirect Cost on Restricted Gift Accounts Form

Completion Guidelines

This form must be submitted for each account for which the IDC is to be waived.

The department chairperson (or designee) should complete the "reason for return" part of the form, and include a brief statement explaining the reason for the request. If the return is requested because an external funding source has disallowed an IDC charge, please include documentation to that effect.

The form should be approved by the dean or director who has transaction authority for the account that receives the IDC credit. Please contact the Budget office if you need clarification regarding the necessary approval authority for your department or unit.

Indirect Cost Recovery (ICR) Entry

Indirect cost recovery (ICR) entries are automatically posted on a nightly process in KFS. The ICR entry is calculated and posted based on the sum of total expenses incurred per restricted account. The credit entry posts revenue to a high-level unrestricted college account. The Indirect Cost Recovery Account Number can be found under the Indirect Cost Recovery Accounts tab for the account in KFS. The ICR account number per college can be located at on the Indirect Cost Recovery Account Matrix (PDF, 48 KB).